Puretek v. Patchwerx - trademark complaint.pdf

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-1-COMPLAINT AND DEMAND FOR JURY TRIAL

Al Mohajerian. Esq. (SBN 182013) MOHAJERIAN, a Professional Law Corporation [email protected] 1901 Avenue of the Stars, 11th Floor Los Angeles, CA 90067 Telephone: (310) 556-3800 Facsimile: (310) 556-3817 Attorneys for Plaintiff PURETEK CORPORATION UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

PURETEK CORPORATION, a California Corporation, Plaintiff, v. PATCHWERX LABS, INC. an Arizona corporation and PAUL SMITH, an individual, Defendants.

Case No. COMPLAINT FOR: (1) TRADEMARK INFRINGEMENT IN VIOLATION OF LANHAM ACT; (2) FALSE DESIGNATION OF ORIGIN IN VIOLATION OF LANHAM ACT; (3) DILUTION OF TRADEMARK (4) COMMON LAW TRADEMARK INFRINGEMENT IN VIOLATION OF LANHAM ACT; (5) UNFAIR BUSINESS PRACTICES; INJUNCTIVE RELIEF (CAL. BUS. & PROF. CODE 17200 ET SEQ.); (6) COMMON LAW UNFAIR COMPETITION; (7) UNJUST ENRICHMENT. JURY TRIAL DEMANDED Plaintiff PURETEK CORPORATION (Plaintiff or PURETEK) complains

and alleges as follows against Defendants PATCHWERX LABS, INC. and PAUL

Case 2:15-cv-07044 Document 1 Filed 09/04/15 Page 1 of 21 Page ID #:1

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-2- COMPLAINT AND DEMAND FOR JURY TRIAL

SMITH (collectively, Defendants). NATURE OF THE ACTION

1. This trademark infringement case arises under 15 U.S.C. 1114, including state law claims over which the court has supplemental jurisdiction because PATCHWERXs complained of conduct arises out of the same case or controversy. The state law claims include common law trademark infringement, unfair business practices under California Business and Professions Code 17200, et seq., and unjust enrichment.

THE PARTIES 2. PURETEK is a California corporation with its principal place of business

at 1050 Arroyo Avenue, San Fernando, CA 91340. 3. On information and belief, defendant PATCHWERX LABS, INC.

(PATCHWERX) is an Arizona corporation with its principal place of business at 1351 S. Clearview Ave., Mesa, Arizona 85209.

4. On information and belief, defendant PAUL SMITH is an individual residing and working in San Francisco, California in his capacity as Vice President of Sales in North America for PATCHWERX (MR. SMITH).

JURISDICTION AND VENUE 5. This Court has subject matter jurisdiction under 15 U.S.C. 1121 (action

arising under the Lanham Act); 28 U.S.C. 1331 (federal question); 17 U.S.C. 501 (copyright infringement); 28 U.S.C. 1338(a) (any Act of Congress relating to patents


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or trademarks); 28 U.S.C. 1338(b) (action asserting claim of unfair competition joined with a substantial and related claim under the trademark laws); and 28 U.S.C. 1367 (supplemental jurisdiction).

6. This Court has personal jurisdiction over Defendants because they have committed or will commit acts of infringement in violation of 15 U.S.C. 1114 and, on information and belief, have or will place infringing products into the stream of commerce, with the knowledge or understanding that such products will be sold in the State of California, including in this District. Defendants complained of conduct will cause injury to Plaintiff within this District. Upon information and belief, Defendants have sold or intends to sell their infringing products within this District, expects their actions to have consequences within this District, and derive substantial revenue from interstate commerce.

7. Venue is proper within this District under 28 U.S.C. 1391(b) and (c) because Defendants transact business within this district and have offered or intends to offer for sale in this district products that infringe the Plaintiffs Trademarks, including the DERMACINRX and DERMACIN trademarks. In addition, venue is proper because a substantial part of the events giving rise to the claim occurred in this district.

FACTUAL BACKGROUND 8. Since 2004, PURETEK has used in commerce its top-quality skin care

products designed to provide relief for irritating inflammatory and pruritic skin conditions caused by numerous etiologies such as eczema, allergic reactions, irritating


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keloid and hypertrophic scars, psoriasis, and allergic reactions under the DERMACINRX and DERMACIN trademarks, including DermacinRx SilaPak (triamcinolone acetonide cream kit), DermacinRx Sila Pak (triamcinolone acetone cream, dimethiocne cream kit), DermacinRx Penetral Cream and Penetral Cream, DermacinRx Inflammatral Pak, DermacinRx Surgical ComboPak and DermacinRx Surgical Pharma Pak, as shown by the DERMASILKRX lettering in its labels and packing (the DERMACINMRX Family of Trademarks or DERMACINRX Family of Products):

Figure 1 DermacinRx Infammatral Pak Figure 2 Dermacin Rx SilaPak

9. Since September 18, 2007, Plaintiff PURTEK has been the owner of the

United States federal trademark registration for DERMACIN, in STANDARD CHARACTER MARK, U.S. Registration No. 3, 294, 679, under International Classes 003. US 001 004 006 050 051 052 for the [n]onmedicated cosmetic preparation based


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on peptides sold as an integral component of cosmetics, specifically, lotions, gels, oils,

creams to reduce the appearance of wrinkles, fine lines, stretch marks and skin

blemishes. FIRST USE: 20040913. FIRST USE IN COMMERCE: 20040913. 10. Today, the DERMACINRX Family of Products is distributed in 42 states

throughout the United States. 11. At all relevant times, Defendants were without authorization to market,

sell or distribute any of the DERMACINRX Family of Products. 12. At no time, did Plaintiff grant permission, license and/or authorization to

PATCHWERX and/or MR. SMITH to market, sell, distribute or in any way use any the DERMACINMRX Family of Products.

13. On or about August 1, 2015, Plaintiff learned that Defendant PATCHWERX LABS, INC., without authorization, permission or license from Plaintiff, purported to market products under the name DERMASILKRX, with the false representation that such infringing DERMASILKRX products contained Plaintiffs proprietary DERMACINRX ingredients. Defendant PATCHWERX, LABS, INC.s proposed packaging and design for its infringing DERMASILKRX products, including DermasilkRX DicloPak (diclofenac sodium delayed release tablets, ranitidine tablets, capsaicin cream), Dermasilk RX DiscloPak (diclofenac sodium delayed release tablets, capsaicin cream) and DermasilkRX SDS Pak (Triamcinolone Acetonide Cream, Dimethicone Cream) (the Infringing DERMASILKRX Products)


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are shown as follows:

Figure 3 DermaSilkRx SDS Pak Figure 4 DermaSilk RX DicloPak

14. On or about August 1, 2015, Plaintiff learned that PAUL SMITH,

identifying himself as Vice President of Sales in North America for Defendant PATCHWERX, had been marketing the Infringing DERMASILKRX Product to Plaintiffs customers and buyers.

15. On or about August 1, 2015, Plaintiff learned that Defendants were falsely representing to the public that its Infringing DERMASILKRX Products contain "Penetral Cream" without authorization or license from Plaintiff as to this proprietary formulation. At the same time, Plaintiff learned that Defendant falsely and without


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authorization used the DermacinRx trademark in Defendants Federal Drug Adminstration application.

16. DEFENDANTS, none of them, had any reasonable grounds for believing that they had authorization to market the distinctive DERMACINRX Family of Products.

17. By their misrepresentation of fact and false affiliation between Defendants Infringing DERMASILKRX Products and Plaintiffs distinctive DERMACINRX Family of Products, Defendants intend to induce buyers, the Food and Drug Administration, the National Institute of Health and members of the public to rely on Defendants referenced false representation.

18. On or about August 1, 2015, Plaintiff learned that Defendants were contacting Plaintiffs clients falsely claiming to be DermacinRx and offering Plaintiffs products (not theirs) at a lower price. However, when the customer indicated readiness to place an order, Defendants switched the order to their Infringing DERMASILKRX Products.

FIRST CLAIM FOR RELIEF (Federal Trademark Infringement 15 U.S.C. 1114, 1116)

AGAINST ALL DEFENDANTS

19. Plaintiff incorporates and realleges paragraphs 1 through 17 of this Complaint.

20. As early as August 9, 2004, Plaintiff has offered their DERMACINRX


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family of nonmedicated cosmetic preparation in International Classes 003. US 001 004 006 050 051 and 052 throughout the United States depicted in Reg. No. 3, 294, 679. A true and correct copy of USPTO Remigration Certificate for the DERMACIN mark is attached hereto as Exhibit A;

21. Specifically, on August 9, 2004, Plaintiff PURETEK filed a United States Service Mark Application in the United States Patent and Trademark Office (USPTO) for the mark DERMACIN (Serial No. 78/464248) covering Nonmedicated cosmetic preparation based on peptides sold as an integral component of cosmetics,

specifically, lotions, gels, oils, creams to reduce the appearance of wrinkles, fine lines,

stretch marks and skin blemishes. FIRST USE: 20040913. FIRST USE IN

COMMERCE: 20040913, in Classes IC 003. US 001 004 006 050 051 and 052. (the DERMACIN Application). A true and correct copy of the TESS record page for the DERMACIN Application is attached hereto as Exhibit B.

22. The similarity between Plaintiffs distinctive DERMACINRX Family of Trademarks, on the one hand, and Defendants Infringing DERMASILKRX Products, on the other hand, will create confusion among consumers as to the origin of the product name given that both names are substantially similar and even the product logo designs for DERMACINRX and DERMASILKRX, as follows:


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Figure 5 Plaintiffs DERMACIN Logo Figure 6 - DEFENDANTS Infringing DERMASILK Logo

23. Defendants Infringing DERMASILKRX Products conduct is likely to

cause confusion or mistake, or to deceive the consumer as to the affiliation, connection or association with the DERMACINRX Family of Trademarks of Defendants goods, services or commercial activities.

24. Defendants use of the Infringing DERMASILKRX Products enables Defendants to benefit unfairly from Plaintiffs reputation and success, thereby giving Defendants infringing products sales for the Infringing name and commercial value they would not have otherwise.

25. Plaintiff is informed and believes, and on that basis alleges, that Defendants intend to gain profits by virtue of its infringement of the DERMACINRX Family of Trademarks, including but not limited to the federally registered DERMACIN trademark (U.S. Reg. No. 3, 294, 679).

26. Plaintiff will suffer irreparable harm from Defendants infringement of the DERMACINRX Family of Trademarks insofar as Plaintiffs invaluable goodwill will be eroded by Defendants continuing infringement.


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27. Plaintiff has no adequate remedy at law to compensate it for the loss of business reputation, customers, market position, confusion of potential customers and goodwill flowing from Defendants infringing activities.

28. Pursuant to 15 U.S.C. 1116, Defendants are entitled to an injunction against Defendants continuing infringement of the DERMACINRX Family of Trademarks. Unless enjoined, Defendants will continue its infringing conduct.

SECOND CLAIM FOR RELIEF (False Designation Of Origin - 15 U.S.C. SECTION 1125)



30. The distribution, display and sale of Defendants Infringing DERMASILKRX Products by PATCHWERX and MR. SMITH that are virtually indistinguishable from authentic DERMACINRX products constitutes a false designation of origin, false description and a false representation that Defendants infringing products originate from, or are sponsored or authorized by PURETEK.

31. Defendants activities in advertising, marketing and selling counterfeit products with PURETEKs trademarks constitute violation of section 43 (a) of the Landham Act, 15 U.S.C. 1125 (a).

32. As a result of Defendants distribution, display and sale of counterfeit DERMACINRX products, PURETEK has lost sales and profits and has suffered and


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will continue to suffer irreparable injury to its business reputation and good will. 33. By reason of Defendants acts of false designation, false description and

false representation as alleged above, PURETEK has suffered and will continue to suffer, substantial damage to its business reputation and good will, as well as diversion of trade and loss of profits in an amount not yet ascertained.

34. Defendants acts of false designation, false description and false representation as alleged above have caused PURETEK irreparable injury and Defendants' threaten to continue to commit such acts, and unless restrained and enjoined, will continue to do so, all to PURETEK's irreparable injury.

35. PURETEK 's remedy at law is not adequate to compensate it for injuries inflicted and threatened.

THIRD CLAIM FOR RELIEF (Dilution of Trademark - 15 U.S.C. SECTION 1125)



37. As previously set forth herein, Plaintiffs DERMACINRX Family of Trademarks are distinctive and famous within the meaning of section 43 (c) of the Landham Act, 15 U.S.C. section 1125 (c).

38. After Plaintiff's DERMACINRX Family of Trademarks became famous, Defendants distributed and/or sold counterfeit DERMACINRX products bearing


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counterfeit copies of one or more of the DERMACINRX Family of Trademarks. 39. Defendants acts tend to and do falsely create the impression with

consumers that the counterfeit DERMACINRX products sold by retailers are authorized or affiliated with Plaintiff, and are of the same high quality and come with the same guarantees as genuine Plaintiffs products, when they do not. The aforesaid acts are likely to dilute the distinctive quality of Plaintiff's trademarks in violation of the Landham Act, 15 U.S.C. 1125 (c).

40. Plaintiff is informed and believes that Defendants committed these acts with the intent to trade on Plaintiff's famous reputation and/or to cause dilution of Plaintiffs DERMACINRX Family of Trademarks.

41. As a result of the foregoing, Plaintiff has no adequate remedy at law and is suffering irreparable harm. Plaintiff is entitled to injunctive relief and all other appropriate remedies under this statute.

FOURTH CLAIM FOR RELIEF (Common Law Trademark Infringement) AGAINST ALL DEFENDANTS

42. Plaintiff incorporates and realleges paragraphs 1 through 40 of this

Complaint. 43. Plaintiff has prior rights in the DERMACIN mark (U.S. Trademark,

Reg. No. 3, 294, 679), as well as its unregistered trademarks in the DERMACINRX proprietary name.


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44. Defendants Infringing DERMASILKRX Products have infringed or will infringe the Plaintiffs DERMACINRX Family of Trademarks by using identical or similar logos and artwork in the DERMSILKRXs products, specifically the Defendants false and misleading reference to the DERMCINRX in their National Institute of Health (NIH) filings. Attached hereto as Exhibit C is a true and accurate copy of Defendants NIH filing for its DermasilkRX product which makes reference, without authorization from Plaintiff to use Plaintiffs DERMACINRX propriety name.

45. Defendants use of its infringing logos and artwork is likely to cause confusion or mistake, or to deceive the consumer as to the affiliation, connection or association of Defendants with Plaintiff, or as to the origin, sponsorship, or approval by Plaintiff of Defendants goods, services or commercial activities.

46. Prior to Defendants first use of the infringing logos and artwork, Defendants were aware of Plaintiffs business and had either actual notice and knowledge, or constructive notice of the DERMACINRX Family of Trademarks.

47. Defendants unauthorized use of the infringing logos and artwork is likely, if not certain, to deceive or to cause confusion or mistake among consumers as to the origin, sponsorship or approval of the Defendants infringing DERMASKILKRX line of products and/or to cause confusion or mistake as to any affiliation, connection or association between DERMACINRX and DERMASILKRX, in violation of 15 U.S.C. 1114(a). Plaintiff is informed and believe, and on that basis alleges, that Defendants infringement of the DERMACINRX Family of Trademarks as described


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herein has been and continues to be intentional, willful and without regard to Plaintiffs rights in the DERMACINRX Family of Trademarks.

48. Plaintiff is informed and believes, and on that basis allege, that Defendants will gain profits by virtue of its infringement of the DERMACINRX Family of Trademarks.

49. Plaintiff will suffer irreparable harm from Defendants infringement of the DERMACINRX Family of Trademarks insofar as its invaluable goodwill is being eroded by Defendants continuing infringement. Plaintiff has no adequate remedy at law to compensate it for the loss of business reputation, customers, market position, confusion of potential customers and goodwill flowing from Defendants infringing activities. Plaintiff is entitled to an injunction against Defendants infringement of the DERMACINRX Family of Trademarks.

50. Unless enjoined, Defendants will continue the infringing conduct. 51. Because Defendants actions have been committed with intent to damage

Plaintiff and to confuse and deceive the public, Plaintiff is entitled to treble its actual damages or Defendants profits, whichever is greater, and to an award of costs and, this being an exceptional case, reasonable attorneys fees pursuant to 15 U.S.C. 1117(a) and 1117(b).

FIFTH CLAIM FOR RELIEF (Unfair Business Practices Cal. Bus. & Prof. Code 17200, et seq.)



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Complaint. 53. The acts of Defendants described above constitute unfair competition

through unlawful, unfair or fraudulent business practices and/or unfair, deceptive, untrue or misleading advertising, as defined by California Business & Professions Code 17200, et seq.

54. Plaintiff has valid and protectable prior rights in the DERMACINRX Family of Trademarks. Plaintiffs DERMACINRX Family of Trademarks do not serve any function other than to identify DERMACINRX, as the source of its FDA approved products. The DERMACINRX Family of Trademarks are inherently distinctive, and, through Plaintiffs long use, have come to be associated solely with Plaintiff PURETEK as the source of the product(s) on which they are used.

55. Defendant PATCHWERXs and Defendant PAUL SMITHs use of its infringing DERMASILKRX logo and design is likely to cause confusion as to the source of PURETEKs DERMACINRX Family of Products and is likely to cause others to be confused or mistaken into believing that there is a relationship between Defendants on the one hand, and PURETEK or DERMACINRX on the other hand, or that DERMASILKRX products are affiliated with or sponsored by Plaintiff.

56. The above-described acts and practices by DEFENDANTS are likely to mislead or deceive the general public and therefore constitute unfair competition in


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violation of California Business & Professions Code 17200, et seq. 57. The above-described acts constitute trademark infringement under Section

32 of the Lanham Act, 15 U.S.C. 1114, and are, therefore, unlawful acts in violation of California Business & Professions Code 17200, et seq.

58. Defendants acted willfully and intentionally in designing the infringing trademarks, with full knowledge of Plaintiffs prior rights in the distinctive DERMACINRX Family of Trademarks and with intent to cause confusion or mistake or to deceive customers into believing that there is an affiliation between PURETEK and PATCHWERX or between Plaintiffs DERMACINRX Family of Products and Defendants Infringing DERMASILKRX Products.

59. The unlawful, unfair, and fraudulent business practices of Defendants described above present a continuing threat to, and are meant to deceive members of, the public in that Defendants will promote the Infringing DERMASILRX Products by wrongfully trading on the goodwill of the DERMACINRX Family of Trademarks.

60. As a direct and proximate result of these acts, Defendants will profit from the strength of the DERMACINRX Family of Trademarks.

61. As a direct and proximate result of Defendants wrongful conduct, Plaintiff will be injured in fact and will lose market share, money, and profits, and such harm will continue unless Defendants acts are enjoined by the Court. Plaintiff has no adequate remedy at law for Defendants violation of Plaintiffs rights.

62. Defendants should be required to restore to Plaintiff any and all profits


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earned as a result of their unlawful and fraudulent actions, or to provide Plaintiff with any other restitution as the Court deems appropriate.

SIXTH CLAIM FOR RELIEF (Common Law Unfair Competition)

AGAINST ALL DEFENDANTS 63. Plaintiff incorporates and realleges paragraphs 1 through 61 of this

Complaint. 64. Defendants PATCHWERXs and MR. SMITHs actions with respect to

unauthorized use of Plaintiffs DERMACINRX Family of Trademarks constitute common law unfair competition.

65. Defendants, each of them, have been, and will continue to be, seriously and irreparably damaged unless Defendants, each of them, are preliminarily and permanently enjoined from using the DERMACINRX Family of Trademarks.

66. By reason of Defendants' actions, Defendants, each of them, have unlawfully profited, and Plaintiff has been damaged in amounts which have not yet been fully determined.

67. Plaintiff is entitled to Defendants profits and to recover its damages, its attorney's fees and costs and disbursements incidental to its claim of common law unfair competition.

SEVENTH CLAIM FOR RELIEF (Unjust Enrichment)



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Complaint. 69. As a result of the conduct alleged herein, Defendants PATCHWERX and

MR. SMITH, each of them, will be unjustly enriched to Plaintiffs detriment. 70. Plaintiff seeks a worldwide accounting and disgorgement of any and all

ill-gotten gains and profits that result from Defendants inequitable activities.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff PURETEK CORPORATION prays for relief, as follows:

1. An order preliminarily and permanently enjoining Defendant PATCHWERX LABS, INC., and its officers, directors, agents, servants, employees, affiliates, attorneys, and all others acting in privity or in concert with them, and their parents, subsidiaries, divisions, successors and assigns, including but not limited to Defendant PAUL SMITH, from directly or indirectly infringing the DERMACINRX brand, or using any other product or packaging design or designations similar to or likely to cause confusion with the Plaintiffs DERMACINRX Family of Products, including but not limited to the infringing DERMASILKRX name, from passing off


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Plaintiffs products as being associated with and/or sponsored or affiliated with DERMACINRX, from committing any other unfair business practices directed toward obtaining for themselves the business and customers of DERMACINRX, and from committing any other unfair business practices directed toward devaluing or diminishing the brand or business of Plaintiffs DERMACINRX Family of Products;

2. Actual damages suffered by Plaintiff as a result of Defendants unlawful conduct, in an amount to be proven at trial, as well as prejudgment interest as authorized by law;

3. Reasonable funds for future corrective advertising; 4. An accounting of Defendants profits from the complained of conduct

pursuant to 15 U.S.C. 1117; 5. A judgment trebling any damages award pursuant to 15 U.S.C. 1117; 6. Punitive damages pursuant to California Civil Code 3294; 7. Restitution against Defendants and in favor of Plaintiff, including

disgorgement of wrongfully obtained profits and any other appropriate relief; 8. Costs of suit and reasonable attorneys fees; 9. Any other remedy to which Plaintiff may be entitled, including all

remedies provided for in 15 U.S.C. 1116, 1117, Cal. Bus. & Prof Code 17200, et seq., 17500, et seq., and under any other California law.


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DATED: September 1, 2015 MOHAJERIAN, a Professional Law Corp.

By: AL MOHAJERIAN, ESQ.

Attorneys for Plaintiff PURETEK CORPORATION

DEMAND FOR JURY TRIAL Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff

PURETEK hereby demand trial by jury on all issues raised by the Complaint.

Al Mohajerian


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DATED: September 1, 2015 MOHAJERIAN, a Professional Law Corp.

By: AL MOHAJERIAN, ESQ.

Attorneys for Plaintiff PURETEK CORPORATION

Al Mohajerian


Puretek v. Patchwerx - trademark complaint.pdf

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